I should probably start with character creation in general, but I've already written a book on character creation. It consists of a series of posts which can be read for free here. I was actually writing another one a while back, that hasn't been finish yet. So look for that one in future posts!
Anyway, how to create villains?
To begin with, you should make a regular character. A good way is to base her around the opposite goals of your protagonist. (You could also do this in reverse). The purpose of a villain is to give the protagonist opposition and to drive the story along.
As a matter of fact, I'm going to stop saying that we're creating a villain because that word is misleading. We're making an antagonist. What's the difference? Let me define the four terms briefly.
Villain: An evil person, up to evil things.
Hero: A good person up to good things.
Protagonist: The hero of the story.
Antagonist: The villain of the story.
Just imagine for a moment that you have a villain protagonist. That would make the hero the antagonist. Meaning from the villains point of view the hero is evil and she's good.
So that's the basic principle of creating antagonist: Evilness is in the eyes of the beholder.
Let's expand on that some.
Whatever the antagonists goals are there should be some nobility in them, someone should be able to believe in the goal, first and foremost your antagonist herself, but other, non-antagonistic, non-maladjusted people. Everyday people, such as some of your readers.
Some people say that your villain needs to be redeemable, I say she shouldn't need redemption in the first place. If her goals are somewhat noble, than what does she need redemption for?
That seems fair enough point to leave off on. As the name suggests, I will be writing more on villains (maybe not immediately, because I'm an erratic person like that).
If you have any questions or have a topic you wish for me to discuss, comment or email me at firstname.lastname@example.org